Stirling engines have been described in the art since their discovery in the early 1800's. Such closed-cycle engines function by compression and expansion of a working medium at different temperatures, either generating mechanical energy from a temperature difference or visa-versa (i.e. generate a temperature difference with mechanical energy).
In contrast to internal combustion engines, the heating and cooling of the hermetically enclosed working medium is executed through heat exchangers on the hot side and the cold side. This allows to operate the engine with practically all available heat sources.
Thermodynamically the Stirling cycle in its ideal configuration is characterized by the efficiency (ç) formula: Eta=1−Tu/To, wherein:
To=Temperature on the hot side (K)
Tu=Temperature on the cold side (K)
This is equivalent to the Carnot efficiency.
The graph of attached FIG. 7 shows the efficiencies in function of the ΔT between the hot gas and the cold gas. In order to achieve high efficiencies it is logic to think first about high temperatures on the hot side of the cycle, typically >800° C. As the graph shows that an ideal Stirling engine would in this case transform 70% of the input heat into mechanical energy. However, real high temperature engines of the state of the art are only capable, to reach 50% of this ideal value resulting in an efficiency of 35% (with other words, work with a “Carnoization factor” of 50%).
The main reason for these losses are:
a) High working frequencies of the compact engines leading to large hydrodynamic friction losses of the working gas;
b) Regenerator losses due to short heating and cooling periods; consequently the “heat-wave” is not completely penetrating the regenerator matrix (heating cycle) and giving back its heat content to the working gas (cooling cycle);
c) Small heat exchanger surfaces, leading to large DT's toward the working gas (DT representing the temperature difference between the fluid in the heat exchangers and the working gas);
d) As shown in attached FIG. 7, the ideal Stirling cycle is composed by 4 steps (moving from 1 to 2, from 2 to 3, from 3 to 4 and back from 4 to 1 in the Volume versus Pressure diagram):                1-2: isothermal compression of the working gas;        2-3: isochoric displacement of the gas (through the regenerator) from cool to hot;        3-4: isothermal expansion of the working gas; and        4-1: isochoric displacement of the gas (through the regenerator) from hot to cool.        
Fast moving, compact high temperature Stirling engines as described so far cannot expand and compress the gas in good approximation to the isothermal process; this results in further losses.